Lotame CEO On Launching A Private Data Exchange, And Why The New DMPs Are “Fool's Gold”

Point solution technology often gets a bad rap, but that’s exactly what Lotame wants to be.

Lotame, which started life as a data management platform (DMP) for publishers, has been systematically unstacking itself to make parts of its DMP available a la carte, including a connected TV product suite and firehose access to Lotame’s global second- and third-party data marketplace.

The most recent menu item is PDX, a private data exchange launched at DMEXCO in Cologne on Wednesday that connects buyers with a vetted set of second- and third-party data sellers. The data in the private exchange is verified using the IAB’s new transparency standards for third-party audience data to check for provenance, recency and other quality criteria. Numerous agency holding companies, including GroupM, IPG and Dentsu, are already buying on the exchange.

“It’s private data modeling that connects to outside sources,” said Lotame CEO Andy Monfried. “Publishers can bring in their data in a privacy aware way and have a way to account for it.”

But publishers haven’t reaped the rewards they were promised by DMPs in the mid-2000s. Turns out advertisers weren’t as enamored of publisher first-party data as you might have thought.

And so the DMP has evolved out of necessity. Although publishers are “turning away from DMPs in their generic form,” Monfried said, they’re still looking for data activation and portability.

AdExchanger caught up with Monfried.

AdExchanger: If you could name a new category for yourself, what would it be?

ANDY MONFRIED: A data solution platform … although I don’t want to be called a DSP. Let’s say data activation platform.

What is Lotame’s business today?

In 2006, we were primarily used for monetization, better targeting, getting better CPMs for publishers. I’d say less than 30% of the work we do today is about tagging and advertising.

And the other 70%?

Fast forward 13 years and our clients are using us for real-time decisioning about what offers to make, creatives to use, some customers use us in call centers when they’re pulling up a profile, for attribution, modeling, prospecting. We used to manage cookies and simple identifiers, now we’re taking in hundreds of signals and unstructured data, like CRM, location data, purchase data, cart-level information and television data and we’re matching it.

The thing we’re really good at is plumbing, at synching all of this data and stitching it together in real time so it can be used outside of advertising.

But is being an independent DMP a sustainable business? There are multiple data protection laws either on the books or on the horizon.

It’s a question we grapple with constantly, and the answer gets to the heart of why we unbundled the DMP. We’re working in environments where customers already have a CDP or a DMP and we’re solving individual problems. We’re not trying to sell against the marketing clouds, because we don’t do everything they do.

How are you moving away from a reliance on cookies as the primary identifier?

That’s what we spend the lion’s share of our engineering on, whether that be using local storage, making decisions outside of the browser or doing better modeling of consumer behavior. We’ve also done a lot of work with folks in the identity space, including Tapad, The Trade Desk and consent platforms. We have open APIs in and out, so we can do that work quickly. We want to be as nimble and open as possible so that any ID or consent flag a consumer wants to be used can be passed into our system.

Some publishers have been switching to what you might call 2.0 DMPs like Permutive and 1plusX. What’s your take?

I want to be blunt. There are a lot of upstarts who do what we did 13 years ago, making hay with slick marketing and by repackaging contextual targeting. These are good companies, but they’re also really good at telling a story in a world of GDPR and CCPA. They’re dumbing down the basic premise of retargeting and contextual targeting with the message that they can create more first-party opportunities. But it’s fool’s gold. That’s not where the industry is.

The business has evolved beyond that to a server-to-server world where information is passed outside of the browser.

Who are your customers today and where are you growing?

We have over 300 DMP customers, and some are publishers, like Hearst and The Weather Company. But most of our growth is coming from markets like Asia and Australia and not from publishers. We have interest from agencies, insurance companies, grocery chains and television networks. We work with Comcast, for example, and the Canadian Broadcasting Corporation.

Are you profitable?

I can say that we’ve been profitable for multiple years, and that’s despite competing against multibillion-dollar companies. We’ve doubled revenue over the last few years and kept the headcount stable at around 135, which means our technology is scalable.

Multibillion-dollar companies like the marketing clouds?

We still compete against the big marketing stacks and we work with them. We’re connected into Adobe, Salesforce, Oracle and Neustar. We’ve actually been brought into multiple DMP pitches by the marketing clouds as a partner. Two or three years ago that would never have happened, but now we’re helping them with synchronization, second-party data and data monetization.

Why stay independent?

There are positives to being in a marketing stack, but there are also some brands that don’t want to be beholden to a stack. They want to pick and choose who they work with. Our biggest asset is actually our independence. Our customers get access to our road map, to our highest-level people and, when they call us, they get a response. Try doing that with some of our competitors.

This interview has been condensed and edited.

 

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